INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Leviability - Penalty confirmed by CIT(A) without assessee having filed any written submissions -

AO levied penalty under section 271(1)(c). Aggrieved, assessee-company filed an appeal before CIT (A) on the ground that initiation of penalty was fatally defective so much so no specific charge had been mentioned making the whole proceedings unsustainable in law. However, CIT(A) dismissed the said appeal due to non-appearance of the assessee and upheld the penalty as levied under section 271(1)(c). Assessee stated that it did not receive any notice, therefore, could not appear before the CIT(A). It further stated that consequently, it could not also file any written submissions before CIT(A) and therefore, the CIT (A) upheld the penalty in dispute ex-parte. Held: There was no doubt that the assessee remained non-cooperative before the CIT (A). But the ground raised by the assessee in the instant appeal i.e. initiation of penalty was fatally defective so much so no specific charge had been mentioned, was very much important to decide the issue in dispute. Therefore, the issue in dispute i.e., whether penalty levied under section 271(1)(c) was justified or not required thorough consideration at the level of the CIT(A), which had not been decided by him. Accordingly, the issue was remanded to the CIT(A) to decide the same afresh.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2007-08

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